Fri, Nov 08, 2019 - Page 12 News List

Yageo reports jump in demand buoys net profit

By Lisa Wang  /  Staff reporter

Yageo Corp (國巨), the world’s third-largest supplier of ceramic capacitors (MLCC), yesterday said its net profits rebounded 44.25 percent sequentially last quarter, as pricing pressure alleviated amid recovering demand from customers in China and other markets in Asia.

During a pickup in demand, Yageo expects its finished goods stock to recede further this quarter as customers have reduced their inventory to normal levels, it said in a statement.

However, the company is unable to fully address this rebounding demand in the short term, as its factory utilization is constrained by a worker shortage in China, it said.

The spring back in orders began last month, helping cut the turnover of finished goods to 70 days this quarter, down from 90 days estimated previously and marking a substantial improvement from 147 days at the end of the first quarter, Yageo said.

Still, the company said it would stay vigilant for the challenging environment, given lingering concerns over the US-China trade dispute, as Yageo remains conservative about its business performance going forward.

During the three-month period to September, Yageo’s net profit jumped to NT$2.04 billion (US$67.1 million), compared with NT$1.42 billion in the previous quarter. That represented an annual slump of 86 percent from NT$14.5 billion.

The quarterly growth reflected a continuous increase in demand in greater China and other Asian regions, it said.

Earnings per share (EPS) improved to NT$4.81 last quarter from NT$3.34 in the second quarter, but were still lower than NT$34.35 a year ago.

Gross margin fell to 31 percent, compared with 32.6 percent in the second quarter and 69.3 percent a year earlier.

In the first three quarters, net profits dipped 79.53 percent to NT$6.05 billion from NT$29.56 billion a year ago, with EPS sinking from NT$70.29 to NT$14.26, while revenue plunged 48.7 percent year-on-year to NT$31.29 billion from NT$60.94 billion.

In a separate statement submitted to the Taiwan Stock Exchange, Yageo said it has tapped David Wang (王淡如) as its new chief operating officer, the second major managerial adjustment in four months after former chief executive officer Dora Chang (張綺雯) stepped down in August.

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